In May 2020, the government announced its 2020-2034 plan, an energy transition plan to deliver 40% renewable energy generation by 2034. It is expected that the share of liquified natural gas (“LNG”) fired plants will be maintained at 32% and all coal-fired power plants will be shut down, with plans to convert half of these into LNG plants. The 2020-2034 plan will also see the closure of nine nuclear plants.
In May 2020, the South Korean government unveiled its $60.9 billion ‘Green New Deal’, also known as the ‘2025 Plan’, as part of its wider national strategy. It includes plans to expand the country’s “green mobility” fleet to 1.33 million electric and hydrogen-powered vehicles and investment in smart grids. The Green New Deal also sets ambitious goals of ending funding of overseas coal plants, transforming urban areas into smart green cities and the introduction of a carbon tax.
South Korea has pledged to be carbon neutral by 2050 and has recently announced plans to construct the world’s largest offshore floating wind farm at the price of about $32 billion. “The Ulsan offshore floating wind farm will be like an oil field on the sea and usher in Korea’s future as an energy powerhouse,” South Korea’s President Moon Jae-in said at the announcement of the project in May 2021.
Green Energy Now Threatens South Korea’s Economy
The following is written by Vijay Jayaraj and published by Real Clear Markets on 29 May 2023.
Ranked 12th in per capita energy consumption in 2021, South Korea uses more than three times the global average. The country’s industrial sector accounts for 40 per cent of total energy consumption. Particularly energy-intensive are large industrial cities such as Ulsan and Gwangyang, which is home to what claims to be the world’s largest steel manufacturing plant.
However, the country’s booming economy is now bracing to meet the impact of recently announced net zero ambitions. These policies are designed to replace existing sources of dependable energy with so-called green technologies that have proven volatile in both reliability and price.
The Net Zero Thrust in South Korea
South Korea is committed to achieving net zero by 2050. In 2021, the country proposed two road maps to achieve this. The first calls for a ban on “all thermal power production using fossil fuels such as coal, LNG (liquified natural gas) and oil to have zero emissions in the electricity generation sector.”
The second would eliminate coal plants while retaining LNG facilities as a flexible power generation source. The plan also calls for an 85 per cent electrification of all vehicles that are on the roads.
Under these proposed road maps, the country aims to reduce the production of electricity with coal by at least 50 per cent by 2030. It is unclear how this loss of generation might be filled by the intermittent sources of solar and wind. The share of solar photovoltaics in South Korea’s total power generation in 2021 was just over 4 per cent.
Businesses see these plans as “threatening to industries” as well as “far-fetched and ambiguous.”
South Korea plans to meet some of its energy needs with large projects such as a $32 billion offshore wind project. Fishing grounds, home to abundant shrimp, butterfish and croakers, appear destined to become the world’s largest offshore wind farm, endangering the ecosystem and the traditional livelihoods of thousands.
Can such an intrusion into pristine marine environments be justified by the energy production of wind turbines? Certainly not! Here’s why.
Though solar and wind power are often touted as renewable energy sources that can help to meet the country’s growing needs, they are highly unreliable because of their dependence on sunlight and breezes and are incapable of providing continuous power to large populations and industries.
In addition, solar and wind are not cost-competitive with fossil fuels and would undercut the ability of commercial and industrial customers to compete.
In short, the large industrial hubs of South Korea – and other enterprises – need the reliability and economical energy of nuclear power, natural gas and coal.
As a matter of fact, these three energy sources have been pillars of economic growth in South Korea this century. To strip the country of these modern miracles of energy production would cripple an economy that relies on industries to meet 32 per cent of its gross domestic product (“GDP”). The highest single GDP contribution to the economy is from manufacturing.
South Korea has an “electricity emergency response manual” that outlines “response procedures in the event of an electricity supply emergency.” The plan provides various measures to reduce energy demand in the event of a supply shortage. Increasing reliance on wind and solar almost surely will lead to such shortages as it has in places like California and Germany.
The more sensible approach would be to retain existing energy sources that supply South Korea’s 524.5 trillion won ($398.6 billion) manufacturing sector. This is especially so since the net zero obsession is an irrational response to a faux climate emergency.